Trichet: Global Imbalances Pose Threat If Not Fixed

Large imbalances between countries running large current account surpluses and deficits pose a threat to the global recovery if they're not addressed, European Central Bank President Jean-Claude Trichet said on Friday.

"If you don't correct these structural imbalances then you have a recipe for new problems ... and big challenges," Trichet said in response to a question at a conference in London.

"It is not only China, but is the case of a number of other emerging countries — in Asia in particular — and of course a number of industrialized countries," with large deficits, he said.

The United States' largest trade deficit with a single country is with China, which tightly manages its currency, the yuan.

Critics say this gives China an unfair competitive advantage in the global marketplace. Washington has long argued for Beijing to allow the yuan to trade more freely, a position being increasingly echoed by European policymakers.